On November 10, 2020 Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company, reported a company update and third quarter 2020 financial results (Press release, Cumberland Pharmaceuticals, NOV 10, 2020, View Source [SID1234570496]). Net revenues from continuing operations during the quarter were $9.3 million. The company also recorded an additional $750,000 in revenue during the third quarter associated with divested product rights for two brands it is no longer distributing.
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The Company’s financial position included $96 million in total assets – with $27 million in cash, $48 million of total liabilities, and $48 million of shareholders’ equity at the end of the quarter.
"As we move to the close of 2020, we recognize that it has been a particularly difficult year with the pandemic impacting all our daily lives," said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "Overall, our third quarter was quite successful, given all the challenges of operating a business in the wake of the pandemic. We were able to generate solid financial performance and advance on important initiatives."
RECENT COMPANY DEVELOPMENTS:
Vibativ
Cumberland’s Vibativ product is being used to help COVID-19 patients who develop bacterial infections in their lungs. Vibativ is a patented, FDA-approved injectable anti-infective for the treatment of certain serious bacterial infections including hospital-acquired and ventilator-associated bacterial pneumonia that can result from COVID-19, flu, and other infections. It addresses a range of Gram-positive bacterial pathogens, including those that are considered difficult-to-treat and multidrug-resistant.
RediTrex Launch
The Company is now finalizing plans for the launch of its newly FDA-approved RediTrex product line. Cumberland will initially implement a soft launch during the fourth quarter of 2020 and intends to follow with a full commercial launch of the brand next spring. The Company believes that RediTrex will be a valuable addition to the portfolio and help further diversify and grow its business.
RediTrex is approved for patients with severe, active rheumatoid arthritis and polyarticular juvenile idiopathic arthritis who have difficulty tolerating or responding to orally delivered methotrexate. It is also approved for symptomatic control of severe, recalcitrant, disabling psoriasis in adults who are not adequately responsive to other forms of therapy.
Caldolor Clinical Manuscripts
During the third quarter, Cumberland announced a study published in the Journal of Orthopedic Trauma, evaluating the efficacy of Caldolor administration in the management of acute pain in orthopedic trauma patients. The study also measured Caldolor’s ability in minimizing opioid use. This single-center, randomized, double-blind, placebo-controlled study found that Caldolor (ibuprofen) Injection reduced the quantity of opioids required to manage pain after a traumatic injury with fracture. In addition, the time to first narcotic medication was longer in the Caldolor group than with hospital standard of care. Pain was also managed better in the Caldolor group compared to standard of care narcotics.
Additionally, the results of a review of nine clinical studies evaluating Caldolor was announced. The comprehensive review was published in the journal, Clinical Therapeutics, and involved over 1,000 adult patients, with over 750 receiving Caldolor and another 300 receiving placebo or a comparator medication. The data noted that the use of Caldolor improved post-surgery recovery, decreased surgical stress, and reduced the use of opioids and over-the-counter medication. The study review determined that patients given Caldolor experienced less postoperative pain and decreased opioid use. Study authors also concluded that the rapid administration and preemptive use of Caldolor should be considered in Enhanced Recovery After Surgery protocols for the management of postoperative pain including that of traumatic origin.
Revolving Credit Loan Agreement
In October 2020, Cumberland entered into a Third Amendment to the Revolving Credit Note and Fourth Amendment ("Fourth Amendment") to the Revolving Credit Loan Agreement with Pinnacle Bank (the "Pinnacle Agreement"). The original Pinnacle Agreement was dated July 31, 2017. The Fourth Amendment provides for a principal available for borrowing of up to $15 million and Cumberland has the ability to request an increase of up to an additional $5 million, upon the satisfaction of certain conditions and approval by Pinnacle Bank. If fully expanded, the Fourth Amendment would provide a maximum principal available for borrowing of up to $20 million, which was also the maximum aggregate principal available for borrowing under the previously amended Pinnacle Agreement.
The Fourth Amendment extends the maturity date of the Pinnacle Agreement through October 1, 2022.
Ifetroban Phase II Clinical Programs
Enrollment in Cumberland’s clinical studies significantly slowed during 2020 due to the COVID-19 pandemic. While enrollment of new patients was limited, the Company ensured that patients already entered into a trial continued to receive their study drug.
During the third quarter, some of Cumberland’s clinical study sites reopened and resumed screening of patients for potential enrollment into the Company’s studies.
Cumberland has completed a pilot Phase II study involving ifetroban in patients suffering from aspirin-exacerbated respiratory disease, a severe form of asthma. A follow-up Phase II study is currently underway for this asthma indication.
The Company is also currently evaluating ifetroban in two pilot Phase II studies in 1) patients with systemic sclerosis or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs and 2) patients with cardiomyopathy associated with Duchenne Muscular Dystrophy. This rare, fatal, genetic neuromuscular disease results in deterioration of the skeletal, heart and lung muscles.
Cumberland is awaiting further study results before deciding on the best path for approval for ifetroban, its first new chemical entity.
FINANCIAL RESULTS:
Net Revenues: For the three months ended September 30, 2020, net revenues from ongoing operations were $9.3 million, compared to $6.9 million for the prior year period. The company also recorded an additional $750,000 in revenue during the third quarter associated with divested product rights.
Net revenue by product for the three months ended September 30, 2020, included $3.6 million for Kristalose, $2.8 million for Vibativ, $1.4 million for Caldolor, $0.2 million for Acetadote (including the brand and Company’s Authorized Generic), $0.5 million for Omeclamox-Pak, and $0.4 million for Vaprisol
For the nine months ended September 30, 2020, net revenues were $27.2 million, up 8.4% from $25.1 million for the prior year period.
Operating Expenses: Total operating expenses for the three months ended September 30, 2020 were $10.5 million, compared to $10.1 million during the prior year period.
Total operating expenses for the first nine months of 2020 were $31.8 million compared to $31.0 million for the nine months ended September 30, 2019.
Earnings: Net income (loss) for the third quarter 2020 was $(0.5) million or $(0.03) a share, compared to $(2.0) million or $(0.13) a share for the prior year period.
Adjusted Earnings (loss) for the third quarter were $0.2 million or $0.02 per diluted share, compared to $(1.7) million or $(0.11) per diluted share for the prior year period.
Balance Sheet: At September 30, 2020, Cumberland had $96.0 million in total assets including $26.6 million in cash and cash equivalents. Total liabilities were $48.2 million, including $17.0 million outstanding on the Company’s revolving line of credit, resulting in total shareholders’ equity of $47.9 million.
Conference Call and Webcast
A conference call and live internet webcast will be held on Tuesday, November 10, at 4:30 p.m. Eastern Time to discuss the results. To participate in the call, please dial 877-303-1298 (for U.S. callers) or 253-237-1032 (for international callers). A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 855-859-2056 (for U.S. callers) or 404-537-3406 (for international callers). The Conference ID for the rebroadcast is 4484046. The live webcast and rebroadcast can be accessed via Cumberland’s website at View Source